Tuesday, October 23, 2012

Crescent Resources has hired a new executive to lead the underwriting and financing of residential real estate projects.

Jaime Pou, formerly vice president of real estate corporate banking at Bank of America Merrill Lynch, will serve as vice president of investments, managing the financial analysis, risk assessment and investment support as Crescent devotes capital to residential projects. He will manage, evaluate and make recommendations for the long-term investment performance of assets for the division and help guide Crescent's residential real estate strategy.

"Crescent is in a solid position to make high-quality investments in residential real estate and develop one-of-a-kind communities where people love to live," Pou said. "I'm excited to join the team."

The hire is the latest move for Crescent Resources, which has been building on its comeback since exiting bankruptcy protection more than two years ago.

When the company filed for Chapter 11, it listed $2.2 billion in assets and $1.9 billion in total liabilities, including $1.5 billion in bank debt. Known for building luxury master planned communities, the developer was hurt as the residential real estate market softened and it struggled to pay on its debt.

Since emerging from bankruptcy protection with a fraction of the former debt, the company moved forcefully into the apartment market and has become more active in building single family homes.

In August, Crescent completed a private offering of $350 million of senior secured notes due in 2017. It closed on $50 million of a $100 million equity commitment from its existing principal equity holders and entered into a new $50 million revolving credit facility. The company has said it planned to use the proceeds to make "targeted investments," primarily in residential and multi-family sectors and to refinance existing debt.

Earlier this month, Crescent acquired land for two residential projects, a 258-acre community outside Orlando and a 250-acre single-family community in Oak Point, Texas. In Texas, Crescent is working with another developer to build 700 to 800 homes with development expected to being in the next 18 to 24 months.

In the Charlotte area, Crescent started construction in July on a new phase of homesites at the Springfield community in Fort Mill, S.C. It is the second phase for that community started this year.

Crescent also started work this summer on an upscale amenity center at Chapel Cove, a community off Shopton Road West on Lake Wylie.

The multifamily division, meanwhile, is building a new apartment community in Tampa and continuing work on Circle South Park in Charlotte. In July, Crescent sold another property, Circle at South End, to Post Properties for $74 million, a state record for that apartment type.

Friday, October 12, 2012

Charlotte’s
office and industrial markets improved during
the third quarter compared to last year, with vacancy rates falling and rents increasing.

The QueenCity also may benefit
from the national attention it received while hosting the Democratic National
Convention in September, according to the latest report by Cushman & Wakefield / Thalhimer.

“Several large corporate relocation candidates are now rumored to
be interested in the region,” the report says. Investors also remain interested
in the city, with well-capitalized investors eyeing office properties including
LakePointe, Vanguard
Centre, ArrowPointOffice Park and Parkways’
six-building suburban office portfolio.

Investors are also interested in Charlotte’s industrial
market. Last quarter, STAG Industrial
Inc., for example, completed two acquisitions, one in Pineville and one in
Huntersville. Two large, long-vacant buildings were bought: Beacon
Partners bought the UAVBuilding in FortMill
and The Silverman Group acquired the former Lucent building at 10000 TwinLakesParkway.

Office vacancy rates dipped to 12 percent during the quarter from
13.1 percent during the same time last year. Direct asking rents rose nearly 4
percent to $18.94 per square foot a year.

The industrial
vacancy rated dipped slightly to 11.8 percent.

The area will still struggle as developers and investors wait before
making long-term decisions to see how the U.S. political landscape and
economic climate unfold during the next few months.

Tenants will also try to negotiate for good deals, including
cheaper rent and extended lease terms, but will have increasing trouble doing
so as vacancy shrinks.

On the industrial
side, the firm expects to hear or two to three new “sizable” investment sale
transactions and build-to-suit projects.
But continued softness in leasing demand and uncertainty in global
economy will keep developers cautious in moving forward, the report says.

Tuesday, October 9, 2012

Charlotte-area home sales prices and closings were up in September, according to the latest data from the Charlotte Regional Realtor Association.

Homes also spent less time on the market and sellers received more of what they were asking for than this time last year.

"The Charlotte housing market is steadily improving with consistent gains in both closed sales and prices," association president Jennifer Frontera said in a statement. "We are experiencing the perfect mix of favorable conditions: high affordability, fewer distressed listings, steady demand and inventory that has finally reached equilibrium at six months supply."

Average sales price in September was $206,051, up 4.8 percent compared to September 2011. Median sales price, which real estate professionals say best shows long-term trends, was $160,000, or up 6.7 percent from a year ago.

Sales closed on 2,244 homes during the month, up 14 percent from 1,068.

Sellers nabbed 91.9 percent of the average list price, up from 89.4 percent. Homes were on the market an average 150 days between listing and closing, 18 days fewer than last year.

Fewer people listed homes for sale as the overall inventory for the Charlotte area fell 26.9 percent compared to September 2011. Foreclosures and other distressed sales accounted for 12 percent of new listings and 15.3 percent of closed sales. In September 2011, such sales accounted for 16.5 percent of new listings and nearly 21 percent of sales.

Thursday, October 4, 2012

The Vue has leased 70 apartments since this summer, when the uptown high-rise's new owner converted 392 condominium units into rentals.

"We have had overwhelming interest from people wanting to be uptown and to live in the one-of-a-kind Vue high-rise," said David Ravin, president and chief executive officer of Northwood Ravin, which manages the property. Northwood Ravin also is an affiliate of Northwood Investors, which purchased the Vue at foreclosure auction in June.

"We are seeing interest actually accelerate into the fall as people become aware the building now has luxury rental options," Ravin said.

Nearly 60 residents currently live in the building, alongside 16 condo owners. The Vue was built as for-sale luxury condominiums but struggled to close sales after construction finished in fall 2010. The former owner later defaulted on the loan.

Northwood Ravin is also building out several spaces that had been left for future penthouse expansion. The firm is remodeling the sales center in the building and plans to begin outdoor additions on the eighth floor pool deck this winter.

The company is also building the Sky Lounge on the 50th floor. Work has been permitted and is expected to be finished by New Year's Eve, Northwood Ravin says.

The Sky Lounge will be 3,800 square feet on the Vue's top floor and include a bar and lounge seating overlooking Bank of America Stadium and the new Knight's ballpark. The lounge, which will be available to residents and guests, will also have a demonstration kitchen and dining room, entertainment room with piano bar, private game room, meeting and conference rooms and a wireless business center with private seating areas overlooking uptown.

These amenities join features already available including 24-hour concierge and security, heated junior Olympic-sized pool and sundeck, and health club with yoga room.

"We really wanted to provide top notch amenities to match the top of the line finishes of the units themselves," Ravin said. "The private Sky Lounge on the 50th floor is really something no one else can offer in Charlotte."

Rent for the units, which range from 650 square feet to 3,586 square feet, is between $1,100 and $5,800 a month.

The conversion to rentals marked the end of two years of uncertainty and legal squabbles for the building.
In 2010, the Vue was lauded as one of the few proposed uptown high-rises that made it up out of the ground despite a crippling recession and weak housing market.

The former developer said he would never lower the luxury-level prices nor convert the building to rentals. Condos started selling in the mid-2000s from just under $200,000 to more than $2 million.

Many would-be buyers lost deposits when they either decided to walk away or couldn't secure financing to complete a sale.

Charlotte's apartment market, meanwhile, has been booming and developers have announced scores of new multifamily projects for the area. Northwood Ravin is actively involved in other local apartment complexes.

Tuesday, October 2, 2012

This morning, CoreLogic released its August Home Price Index, which showed home prices nationally increasing annually by 4.6 percent in August compared to the previous year. The change is the biggest year-over-year improvement since July 2006, the real estate research firm reported.

In the Charlotte-Gastonia-Rock Hill area, home prices rose 3.8 percent in August compared to a year ago. Home prices rose 0.6 percent in August compared to July, according to CoreLogic.

Then, this afternoon Wells Fargo released its regular report on the housing market, which also suggested conditions are improving.

"Housing continues to swim against the economic tide, with more reports tending to show improvement rather than deterioration," the authors wrote.

Among the positive signs noted:

- Expectations for new home construction have been bolstered by increased buyer traffic and assurances from the Federal Reserve that it will continue buying mortgages until well after the economy gets back on its feet again.

- Builder sentiment has continued to increase, with the National Association of Home Builders/Wells Fargo Homebuilders’ Index rising to 40 in September.

- Sales of both new and existing homes have also held near their recent higher levels and home buying is likely being constrained by a lack of supply in many areas. Low inventories are one reason that home prices have improved as much as they have in recent months.

- The S&P/Case Shiller 20-city home price index has risen 1.2 percent over the past year, and median new home prices, as measured by the National Association of Realtors are up 9.5 percent from August of last year.

Monday, October 1, 2012

The hot Charlotte
apartment market shows no sign of cooling, according to the latest report
produced by Real Data.

During the past six months,
the average vacancy rate for area apartments continued to improve to reach 5.8
percent -- down from a high of nearly 14 percent in February 2010, the report
says. Demand also proved to be strong with 2,490 units absorbed between Feb.12
and Aug. 12.

Rental rates also showed solid growth, rising five percent to an
average $839 per month.
One bedroom rents average $746 a month, two
bedroom units average $855 a month and three
bedrooms average $995 a month.
Average rents recently bottomed out around $646 in February 2005.

New development continues with 1,608 new units finished during
the last six months.
Currently, there are 4,329 units being built and another 11,217 units proposed.
Many of the units are in the Uptown, South End, Northlake and University City areas.

While lending remains subdued for many types of commercial
projects, apartment developers have been able to find capital for projects.

Rents are forecast to grow 5 percent in the next year as average
occupancy reaches 95 percent.

The apartment industry
typically operates on a boom-bust cycle. While the housing market and
commercial development in general has been weak, investors and developers have
flocked to the Charlotte
multifamily market.

More people are expected to rent thanks to demographics (more
younger professionals moving into the market) and the recent housing bust that has
scared some would-be buyers.

Demand will wane, the report says, but it will continue to exceed
new supply over the next two years.

Rents are projected to grow, but remain cheaper than the cost of
owning a home, Real Data research shows.

And rent growth and occupancy rates are expected to see “significant”
growth during the next two years.

The acquisition marks $40 million worth of deals for the Charlotte-based group during
the third quarter.

Other deals include NorthcrossCommons in Huntersville and NorthRivers Market in North Charleston.

In all, Hawthorne Retail is seeking to acquire $200 million worth of shopping
centers throughout the Southeast during the next few years and anticipates
acquiring additional shopping centers through the rest of this year.

Hawthorne Retail Partners operates and invests in shopping
centers located in the Southeast on behalf of third party clients,
institutional investors and private investment groups. Hawthorne
Retail Partners is a division of The Hawthorne Companies, a diversified real
estate investment and management company, whose other division, Hawthorne
Residential Partners, is a Greensboro
based apartment management and investment company. Collectively, the Hawthorne
Companies manages over 90 properties throughout the Southeast.

Ely Portillo

Ely Portillo

About this blog

Ely Portillo covers economic development for the Observer, writing about who's building what in a city that seems to be sprouting new apartment and office towers on every corner. He also writes about Charlotte's airport, a major hub that's also undergoing a huge growth spurt. A transplant from Maryland, he's been reporting on his adopted hometown for more than five years. If you have a tip or story idea to share, you can contact him by email or give him a call at 704-358-5041. For the latest news, follow him on Twitter @ESPortillo.